All Forum Posts by: Justice Jacobs

Hello, Jon, I own personal care homes in Georgia, which cater to long-term care for seniors and individuals with disabilities. How much involvement are you comfortable with having for this type of business. Are you wanting to be solely an investor, an operator, or both?

I could not agree more Lynda, We own facilities in Georgia, and we have been experiencing a significant increase in potential clients. It is a best kept secret that the smaller facilities are where loved ones receive the quality time and attention they deserve.

@John Clarken

I am glad you are being thorough on the due diligence, often people trip themselves up by being careless. Being added as an additionally insured is a great thing to do. With regard to further addendums, I would consider a triple net (NNN) arrangement, since it can be an increase in wear and tear on the property. I couldn't imagine why a residential or a commercial lease would not work, as long as all of the requirements for both parties are satisfied.

The residential lease may be simpler, but it may not cover everything you need. But, the "complicated" part of the arrangement would be them holding up the end of the deal by paying on time, having insurance, and reducing liabilities the best they can. If you feel the residential lease doesn't cover everything you feel it should, either add to it, or going with the commercial lease can provide further detail to the "edge cases". Let me know how the arrangement turns out! 

Hello John, 

Great question and congratulations on your progress thus far with investing. Just to give you a bit of my background, I am the owner-operator of RAL's in GA. I pair investors with opportunities in residential assisted living space. It would be a great opportunity to explore, and I think you are fortunate to have a property suitable for that particular operator. With regard to liability protection, it would be a good idea to consult a lawyer. However, you can also do some due diligence by doing the following:

1) Is the provider licensed via the state regulatory body (i.e. Georgia has the Georgia Dept. Of Community Health, DCA)

    You can contact me if you would like assistance finding this information for your state.

2) They should have commercial liability insurance, but double check with a lawyer to see how/where you could be held liable. Depending on the arrangement (lease, lease-purchase, profit sharing, etc.), you should have zero liability for the mishaps of the operator, since the license they have to legally operate the business would be expected to assume liability.

3) My current understanding is that the ADA requirements would only be mandatory if it was a commercial facility dedicated to a particular use (i.e. I have seen a retrofitted single family home with a zoning change, which did require ADA compliant modifications; the same was not true for a large single family home with traditional zoning being operated similarly). I would need to get in the rules and regulations for the ADA criteria to verify. They are generally correct in stating that the type of resident they accept would dictate requirements needed. If they do not have the ability to accept residents in wheelchairs, it would be unwise to accept them.

Finally, at least in the state of GA, you would not need a license as the owner of the home, but that could vary on your state and local rules and regulations. I could not imagine why you would need to have a license since that would not be the case if they were operating a different type of business out of the home? Once again, I can try to assist in the state you are operating in.  

DISCLAIMER: This is not legal advice. Please consult a lawyer in your state of operation.

@Colton T. From my experience, it will continue to grow! The main reason being, there is no shortage of individuals who need long-term, quality, affordable housing to place their loved ones in. You could use the "silver tsunami" mantra that has been said, or you could look at the demographics for the area you plan to invest/open a facility in. 

How many residents will depend on your ability to manage and/or outsource the management for said facility. There are homes the size of a traditional 3bed/2ba being used as assisted living facilities/personal care homes to large complexes dedicated to caring for our aging population. Let me know if you have any questions!

@Steve Ehrman That's great! I would love to stay on top of your progress with this project. It's a great thing you are doing. Best of luck. 

@Steve Ehrman

There is a shortage of quality senior housing in this area? You say "adult foster care", are these nursing homes that are accepting various insurance programs and government sponsored programs, or are they private pay at $4,800? 

@Steve Ehrman That makes sense given your intention. Given that you would be unlicensed, you would be willing to only accept residents able to afford services out of pocket? 

@Matt Fisher

I personally have never rented a home to another individual to do this, but I do have experience as the owner-operators of RAL's.  One of the most effective ways to mitigate your risk if you ever decided to allow someone to operate this type of business out of your rental is to, like @Gail K. stated, make sure they are licensed to manage and adequately take care of the individuals they are caring for. 

You would check with the state regulatory agency for the proof that they are licensed via whatever state the home is located in. This information would also show major infractions, potential cases of abuse and/or neglect, complaints, etc. Further, HOA's would more than likely have an issue with operating this style of business in the neighborhood as they sometimes consider these boarding houses. Message me if you have any further questions. 

@Steve Ehrman

Hello Steve, I apologize for being a bit late to your post. You are currently managing 21 units/5 properties that are traditional rentals, and you are looking to buy this one to use as a residential assisted living (RAL)? As long as you've checked the Michigan rules and regulations as well as down to the city/county, then it is worth exploring further. Do you have any experience with a like-kind investment?

Did you intend to self-manage? Hire a staffing agency for the caregivers? Have you decided if this facility would be ideal for your target clientele? I'm always open to share what I have learned managing RAL's.